The Role of financial reporting in fixing investment opportunities uncertainty

Reliable financial reporting plays a significant role in reducing information risk and risk for shareholders and investors. The importance of this issue is such that it influences the decisions of users.The present study refers to the role of financial reporting in fixing investment opportunities uncertainty in the companies accepted in the Tehran stock exchange. Informational uncertainty features measured by profit prediction dispersion of each stock, error of predicting each stock profit and the stock returns variability. The study assumptions tested by using panel data regression and the minimum square method for multivariable regression. The study population is nonfinancial companies in the Tehran stock Exchange in 1390-1398.In order to measure the quality of financial reporting, following relationship (2006) of verdy et al. (2008) has been used and three profit prediction dispersion criteria for each stock prediction error and stock returns variability used for measuring variables uncertainty. The results of a survey of 114 member companies of the statistical sample show that there is a significant and inverse relationship between the quality of financial reporting and the distribution of earnings per share forecast as one of the variables of information uncertainty. According to the results of the second model test showed that increasing the quality of financial reporting reduces information uncertainty. The results of the third model test showed that there is no significant relationship between the quality of financial reporting and the variability of stock returns as a measure of information uncertainty.